Astra Agro Lestari (AALI IJ)

Transcription

1 Equity Research Company Update Wednesday,07 November 2018 BUY MAINTAIN Last price (IDR) 11,775 Target Price (IDR) 16,500 Upside/Downside +40.1% Previous Target Price (IDR) 11,800 Stock Statistics Sector Bloomberg Ticker Plantation AALI IJ No of Shrs (mn) 1,925 Mkt. Cap (IDRbn/USDmn) 22,663/1,513 Avg. daily T/O (IDRbn/USDmn) 14.0/0.9 Major shareholders (%) Astra International 79.7 Public 20.3 Estimated free float 20.3 EPS Consensus (IDR) 2018F 2019F 2020F Danareksa Consensus Danareksa/Cons (3.4) 4.7 (3.4) AALI relative to JCI Index Source : Bloomberg x Yudha Gautama (62-21) ext 3509 yudha.gautama@danareksa.com Astra Agro Lestari (AALI IJ) Volume Push Ahead We fine tune our FY18/19 net profit estimates by -8%/0% to Rp1.50tn/Rp1.87tn based on changes in our CPO price and exchange rate assumptions as well as after incorporating the expectation of higher FFB purchases and CPO trading. We expect 4Q18 sales volume to remain high, helped by inventory drawdown and elevated 4Q18 production. Maintain BUY. 9M18 results summary. AALI posted 3Q18 net profits of Rp340bn (-11% YoY, - 21% YoY), resulting in 9M18 net profits of Rp1.12tn (-20% YoY), reaching 69% of our full year forecast and 74% of the consensus. The 9M18 revenues were better-than-expected at Rp13.76tn (+10% YoY), driven by higher sales volumes, despite lower ASP. The 9M18 CPO ASP was Rp7,639/kg (-8% YoY), while CPO & derivatives sales volume reached 1.56mn tons (+23% YoY). The 3Q18 CPO ASP was Rp7,277/kg (-7% YoY, -8% QoQ) and CPO & derivatives sales volume was 563.3k tons (+31% YoY, +10% QoQ). Incorporating higher FFB purchases and CPO trading. Aligned with AALI s strategy, we incorporate higher FFB purchases and CPO trading into our model while maintaining our FY18 FFB growth estimate of 7%. Given AALI s FFB purchases accounted for 64% of FFB production in 9M18, we increase our FFB purchase assumption to 60% of FFB production (from 49%) in FY18 and beyond. In addition, we also incorporate a CPO trading volume assumption of 300k tons for FY18 and beyond, given that the 9M18 CPO trading reached 243.6k tons. The company provided guidance for CPO trading of ~30k tons/month and a trading gross margin of 1.5-2%. Meanwhile, AALI s inventory was high at k tons (higher than its average of 100k tons) due to a bumper crop. As such, we expect the 4Q18 earnings to be supported by inventory drawdown, and possibly high production in 4Q18. We fine tune our FY18/19 assumptions. In addition, we also lower our FY18 CPO price assumption to MYR2,300/ton (from MYR2,450/ton), while keeping our FY19 CPO price assumption unchanged at MYR2,550/ton. Meanwhile, we also adjust our FY18/19 MYR/USD exchange rate assumption to MYR4.0/USD (unchanged)/myr4.1/usd (from MYR4.0/USD) and our FY18/19 IDR/USD exchange rate assumption to Rp14,000/USD (from Rp13,600/USD)/ Rp14,400/USD (from Rp13,600/USD). Hence, we fine tune our FY18/19 net profits estimates by -8%/0% to Rp1.50tn/Rp1.87tn, respectively. Maintain BUY. We maintain our BUY call on AALI with an unchanged TP of Rp16,500 based on 17.0x P/E and FY19 EPS as we remain upbeat on the CPO price outlook for FY19. The counter is currently trading at 12.1x FY19 P/E. Key Financials Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Revenue (IDRbn) 14,121 17,306 18,029 20,480 20,759 EBITDA (IDRbn) 3,662 4,178 3,590 4,112 3,950 EBITDA Growth (%) (14.1) 14.6 (3.9) Net profit (IDRbn) 2,007 2,010 1,500 1,868 1,761 EPS (IDR) 1, , EPS growth (%) (25.4) 24.6 (5.7) BVPS (IDR) 8, , , , ,212.8 DPS (IDR) PER (x) PBV (x) Dividend yield (%) EV/EBITDA (x) Source : AALI, Danareksa Estimates See important disclosure at the back of this report 1

2 Exhibit 1. Revenues and Growth Exhibit 2. Net Profits and Growth Exhibit 3. Margins Exhibit 4. Gearing Level See important disclosure at the back of this report 2

3 Exhibit 5. AALI 9M18 Results Summary AALI 3Q18 Results 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 YoY QoQ CPO Sales Volume (Tons) 309, , , , , , ,871 53% 19% PK Sales Volume (Tons) 52,024 44,005 58,591 81,630 74,200 69,800 98,287 68% 41% Refined Products Sales Volume (Tons) 100, , ,434 80, , , ,427-12% -12% % of ours % of consensu Average CPO Price (Rp/kg) 8,953 8,119 7,855 8,157 7,855 7,931 7,277-7% -8% COGS/kg (Rp/kg) (6,696) (7,268) (6,335) (6,390) (6,677) (6,309) (5,665) -11% -10% Revenue (Rp bn) 4,491 4,055 3,947 4,813 4,446 4,575 4,740 20% 4% 86% 84% Gross profit (Rp bn) 1, , % 10% 72% 76% Operating Expense (Rp bn) (277) (265) (285) (267) (279) (285) (309) 8% 8% Operating profit (Rp bn) 1, % 10% 68% 80% Int Expense (Rp bn) (24) (32) (31) (45) (47) (56) (65) 108% 16% Forex Gain/(Loss) (Rp bn) 19 2 (19) Others and int income (Rp bn) 9 (28) 48 (14) 73 (6) (85) Pretax profit (Rp bn) 1, % -6% 70% 78% Net profit (Rp bn) % -21% 69% 74% Tax Rate -26% -31% -27% -31% -26% -27% -36% Gross Margin 31% 16% 21% 26% 17% 20% 21% Operating Margin 25% 10% 14% 20% 10% 14% 14% Net Income Margin 18% 5% 10% 13% 8% 9% 7% See important disclosure at the back of this report 3

4 Exhibit 6. Forecast Change AALI 2018F 2019F 2020F In Rpbn New Old %change New Old %change New Old %change Profit & Loss Revenue 18,029 16,026 12% 20,480 17,054 20% 20,759 17,301 20% COGS (14,440) (12,342) 17% (16,320) (13,004) 26% (16,785) (13,439) 25% Gross profit 3,589 3,684-3% 4,161 4,051 3% 3,974 3,862 3% Operating profit 2,434 2,594-6% 2,907 2,908 0% 2,695 2,694 0% Net profit 1,500 1,639-8% 1,868 1,874 0% 1,761 1,765 0% Core Profit 1,500 1,639-8% 1,868 1,874 0% 1,761 1,765 0% EPS % % % Gross margin 19.9% 23.0% 20.3% 23.8% 19.1% 22.3% Operating margin 13.5% 16.2% 14.2% 17.1% 13.0% 15.6% Net margin 8.3% 10.2% 9.1% 11.0% 8.5% 10.2% CPO Price (MYR/ton) 2,300 2,450-6% 2,550 2,550 0% 2,550 2,550 0% AALI's CPO Price (Rp/kg) 7,579 7,889-4% 8,483 8,239 3% 8,483 8,239 3% FFB Production (k tons) 5,591 5,591 0% 5,759 5,759 0% 5,874 5,874 0% Implied FFB purchased (k tons) 3,355 2,740 22% 3,455 2,822 22% 3,524 2,878 22% FFB Processed (k tons) 8,945 8,330 7% 9,214 8,580 7% 9,398 8,752 7% CPO Production (k tons) 1,834 1,737 6% 1,889 1,789 6% 1,927 1,825 6% CPO Sales Volume (k tons) 1,164 1,138 2% 1,199 1,172 2% 1,223 1,195 2% Kernel Sales Volume (k tons) % % % Refined Products Sales Volume (k tons) % % % CPO Trading Volume (k tons) % % % USD MYR Assumptions USD IDR Assumption 14,000 13,600 14,400 13,600 14,400 13,600 See important disclosure at the back of this report 4

5 Exhibit 7. Income Statement Year to 31 Dec (IDRbn) 2016A 2017A 2018F 2019F 2020F Revenue 14,121 17,306 18,029 20,480 20,759 COGS (10,445) (13,160) (14,440) (16,320) (16,785) Gross profit 3,676 4,145 3,589 4,161 3,974 EBITDA 3,662 4,178 3,590 4,112 3,950 Oper. profit 2,659 3,051 2,434 2,907 2,695 Interest income Interest expense (145) (132) (262) (262) (262) Forex Gain/(Loss) Income From Assoc. Co s (13) (84) (34) Other Income (Expenses) (519) Pre-tax profit 2,209 2,939 2,220 2,766 2,608 Income tax (94) (825) (644) (802) (756) Minority interest (107) (103) (77) (96) (90) Net profit 2,007 2,010 1,500 1,868 1,761 Core Net Profit 1,806 2,005 1,500 1,868 1,761 Exhibit 8. Balance Sheet Year to 31 Dec (IDRbn) 2016A 2017A 2018F 2019F 2020F Cash & cash equivalent ,209 2,705 Receivables Inventory 2,097 2,018 2,674 3,331 3,426 Other Curr. Asset 844 1,261 1,383 1,563 1,608 Fixed assets - Net 12,057 11,745 11,166 11,139 11,104 Other non-curr.asset 8,117 8,945 9,954 9,737 9,540 Total asset 24,226 24,935 25,886 27,689 29,102 ST Debt 1, Payables 1, ,198 1,341 1,378 Other Curr. Liabilities ,090 1,218 1,288 Long Term Debt 2,116 3,369 3,375 3,375 3,375 Other LT. Liabilities Total Liabilities 6,633 6,399 6,376 6,665 6,787 Shareholder'sFunds 17,135 18,066 18,962 20,380 21,581 Minority interests Total Equity & Liabilities 24,226 24,935 25,886 27,689 29,102 See important disclosure at the back of this report 5

6 Exhibit 9. Cash Flow Year to 31 Dec (IDRbn) 2016A 2017A 2018F 2019F 2020F Net income 2,007 2,010 1,500 1,868 1,761 Depreciation and Amort. 1,001 1,068 1,212 1,264 1,317 Change in Working Capital (779) (429) (454) (760) (109) OtherOper. Cash Flow 349 (28) Operating Cash Flow 2,578 2,621 2,839 2,735 3,234 Capex (1,827) (1,466) (1,753) (1,074) (1,134) Others Inv. Cash Flow (562) (177) Investing Cash Flow (2,388) (1,644) (1,635) (994) (1,006) Net change in debt (3,632) (132) (594) 0 0 New Capital 3, Dividend payment (191) (997) (603) (450) (560) Other Fin. Cash Flow (101) (120) (185) (166) (171) Financing Cash Flow 47 (1,247) (1,382) (615) (731) Net Change in Cash 237 (269) (179) 1,125 1,496 Cash - begin of the year ,209 Cash - end of the year ,209 2,705 Exhibit 10. Key Ratios Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Growth (%) Sales EBITDA (14.1) 14.6 (3.9) Operating profit (20.2) 19.4 (7.3) Net profit (25.4) 24.6 (5.7) Profitability (%) Gross margin EBITDA margin Operating margin Net margin ROAA ROAE Leverage Net Gearing (x) Interest Coverage (x) Source : AALI, Danareksa Estimates See important disclosure at the back of this report 6